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Iran piles up goods as subsidy system changes

Iran is preparing for the gradual withdrawal of subsidies by stockpiling basic commodities, an official at the Ministry of Commerce says, Press TV reported.

"To avoid potential price fluctuations as a result of the targeted subsidies system, the Commerce Ministry has started stockpiling basic commodities such as red and white meat, dehydrated milk, dairy products, eggs, lentils, beans and cheese," the spokesman for Iranian Commerce Ministry, Alireza Shojaei, said on Sunday.

He said the private sector would be involved in the plan, adding that "some two billion dollars have been allocated by the banks participating in the plan."

The Iranian official explained that the basic commodities would be distributed if there were a baseless increase in the prices after a new subsidies system is implemented.

In early January, Iran's legislative body, the Majlis, ratified a bill proposed by the government concerning the implementation of the targeted subsidy plan.

The legislation will result in the distribution of a portion of recovered revenue to low-income groups.

The government of President Mahmoud Ahmadinejad believes it will save up to 30% of the annual budget by rolling back subsidies on fuel and some food items.